Rogers Media uses cookies for personalization, to customize its online advertisements, and for other purposes. Learn more or change your cookie preferences. Rogers Media supports the Digital Advertising Alliance principles. By continuing to use our service, you agree to our use of cookies.

We use cookies (why?) You can change cookie preferences. Continued site use signifies consent.

Aug 6, 2014
Geir Moulson, The Associated Press

BERLIN – Formula One chief Bernie Ecclestone’s departure from a Munich court with a fleeting “bye-bye” after having bribery charges dropped in exchange for an enormous $100 million payment left a sour taste for many in Germany.

However, while the size of the super-wealthy 83-year-old’s payment appears to be unprecedented, the legal device that made it possible is commonly used and the motor-racing boss isn’t the first prominent beneficiary. Here’s a look at how the deal was possible.

Q: What’s the law?

A: Germany’s criminal code says prosecutors and courts can agree to close proceedings in exchange for a payment, community service, reparations or other conditions “if the degree of guilt does not present an obstacle.”

The possibility is available for any offence carrying a minimum sentence of less than a year in prison — such as the charges Ecclestone faced, bribery and incitement to breach of trust.

It’s generally used in cases where both sides are struggling to prove their case. The court delivers no formal verdict, but the defendant isn’t convicted and effectively wins a legal stamp of innocence.

Q: Why did Ecclestone benefit?

A: By the time Ecclestone’s lawyers called for the trial to be closed, the court had heard more than three months’ evidence. It made clear Tuesday it had serious doubts he could be convicted.

Other mitigating circumstances included the Englishman’s age and the fact he came to Munich to face the charges although it would have been hard to force him.

Proceedings might have dragged on for months to little avail had the trial continued, tying down judicial officials and leaving Ecclestone spending two days a week in Munich while also running F1.

Q: Where did the $100 million figure come from?

A: It emerged from negotiations between Ecclestone’s lawyers and prosecutors, and was endorsed on Tuesday by judges hearing the case.

There’s no fixed formula for how much a defendant pays and the figure doesn’t reflect the degree of possible guilt.

Judge Peter Noll said Ecclestone had given assurances that $100 million represented “an appreciable portion” of his wealth without overburdening him.

Q: How come another player in the story was convicted but Ecclestone wasn’t?

A: The charges centred on a $44 million payment to German banker Gerhard Gribkowsky, who is serving an 8 1/2-year sentence for taking the money. Gribkowsky was already convicted of corruption, tax evasion and breach of trust.

Ecclestone denied wrongdoing and said Gribkowsky, who was in charge of selling public-sector bank BayernLB’s 47 per cent stake in F1 in 2005, blackmailed him. The court cited doubts whether it could be proved that Ecclestone committed an offence and knew he was doing so. The case against Gribkowsky also involved tax evasion, and in Germany tax evasion cases involving more than 1 million euros ($1.34 million) almost always draw a prison sentence.

Q: How was the Ecclestone deal received in Germany?

A: It didn’t go down well. Wednesday’s front-page headline in the mass-circulation Bild daily screamed: “Another rich man buys himself free!” The Munich-based Sueddeutsche Zeitung daily noted that, while the huge payment was a result of Ecclestone’s “exorbitant” wealth, the judicial system “accepts appearing to be buyable.”

Munich prosecutors defended the system, saying ordinary people can also benefit from this kind of trial closure.

Q: How many people benefit from this law?

Prosecutors can agree with the defence to drop a case before an indictment is filed. Official statistics show that in 2012, the last year for which figures are available, 183,295 cases were dropped at that stage under the legislation — 154,024 in exchange for a payment.

Once an indictment is filed, a court can drop a case following an agreement between prosecutors and the defence. In 2012, courts dropped 57,655 cases under this legislation. Statistics on how many of those deals involved payments, and on the amounts paid, were not available. By comparison, courts concluded a total 736,029 cases that year with or without a verdict.

Q: Have there been high-profile cases before?

A: In 2006, then-Deutsche Bank chief executive Josef Ackermann was one of six defendants who paid a total 5.8 million euros (then worth $7.6 million) to end a trial over disputed bonuses paid to bosses at German phone company Mannesmann when it was bought by Vodafone in 2000.

Ackermann had irked Germans on the trial’s first day by posing for photographers with his fingers raised in a victory sign.

In 2001, former Chancellor Helmut Kohl paid 300,000 marks (then $140,000) to end an investigation into breach of trust charges stemming from his role in a party-financing scandal.

Q: Is this possible elsewhere in Europe?

Not in the same way. Other countries have plea-bargaining systems that generally focus on the nature of a conviction.

In 2011, neighbouring Belgium introduced an amicable settlement law for major fraud cases after a slew of proceedings dragged on so long that they reached their statute of limitations. It allows the government to recoup some funds without securing a conviction, but hasn’t proven popular.

Italy’s system allows for plea bargains on minor offences that don’t show up on the public record.

Almost Done!

Please confirm the information below before signing up.

{* #socialRegistrationForm *}
{* socialRegistration_firstName *}
{* socialRegistration_lastName *}
{* socialRegistration_emailAddress *}
{* socialRegistration_displayName *}
By clicking "Create Account", I confirm that I have read and understood each of the website terms of service and privacy policy and that I agree to be bound by them.